In this edition: How long will it take for your property to rent? Tenancy Application Forms Essential Tips for First Time Property Investors Rents down

May 2014

Interstate Investors Eye Brisbane Claim the Cash Now or Later… How to Choose the Best Strategy for YOUR Investment! A Selection of Properties Recently Leased Quote Calendar of Events

They say that autumn is a bitter sweet

season, and while we farewell the won-

derful Chelsea as she prepares to have

a baby and move away from Brisbane,

we welcome Haleigh as she steps into

Chelsea's position. A loyal, reliable and

efficient team member, Chelsea will be

much missed even as we wish her well

and celebrate this special new chapter in

her life. We feel incredibly blessed that

the super-capable Haleigh, who has

been with us several months and with

RE/MAX for seven years, has been

working closely with Chelsea for the past

few months to ensure a smooth transi-

tion in assuming the trust account man-

agement role and keeping everything

running seamlessly.

Chris McCall has now been with us a

month and has been doing a fabulous

job increasing our communications and

reporting to landlords during the letting

process and look after new business

enquiries. This, along with the appoint-

ment of Julie Francis-Fahey, another

Senior Property Manager who we also

welcomed to the team this month, will

reduce the workload for Helen (whose

hours have gotten a little crazy as a con-

sequence of attracting lots of new busi-

ness) and allow our business to continue

to grow while still offering great individual

service to each and every one of our

landlords and tenants. We have attached

profiles for Chris, Helen and Julie to give

you a clearer picture of the experience

and service each specifically offers.

We will always welcome any feedback

and suggestions you have for how we

can improve our services and keep eve-

rything moving forward ( email chris-

tinapenrose@remax.com.au) and even

more especially because we believe we

have the right people to lift the service

we provide to another level again and

are keen to do so! You now also have a

choice of property manager available so

please feel free to let me know if you

have a particular preference to stay with

Helen as your manager or would be

happy to work with Julie in moving for-

ward.

With the end of the financial year going

to be here before we know it we would

encourage you to look at your tax posi-

tion and consider if it would be beneficial

to do any maintenance or improvements

before June 30th and let us know as

soon as possible, so we can help organ-

ise services for your property before the

last minute rush!

Wishing you health wealth and happi-

ness,

Christina

Welcoming autumn with new team members

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

How long will it take for your property to rent?

That of course depends on the time of the year so here are the latest statistics for March.

BRISBANE STATISTICS The Market

Source: rentfind.com.au

Brisbane, QLD March 2014 Annual Change

Median Weekly Rent - House $415 5.1% increase

Median Weekly Rent - Unit/Apartment

$390 2.6% increase

Days on Market (Avg) 26.6 3.7 decrease

Days Vacant (Avg) 14.9 4.1 decrease

Tenancy Application

Forms

Our agency has a strict tenancy

application process.

All applicants must complete our

best practice application form (a

copy is available upon request)

and provide 100 point identifica-

tion, proof of income, personal

references and proof of previous

living arrangements. We also

check the tenant details against a

national tenancy default data-

base.

We verify the applicant‟s details

as part of application processing

process and discuss all tenancy

applications with you. What we

are seeking from the tenant on

your behalf is sound evidence of

the following;

The applicants‟ ability to pay

the rent for the property; and

The applicants‟ ability to care

for the property.

Please note that the RTRA Act

allows for a minor (a person un-

der the age of 18) to apply for a

property in their own right. Of

course, as with all applicants, mi-

nors would be assessed the

same ways as adults and appro-

priate and sufficient evidence of

meeting the criterion mentioned

above will be taken into consid-

eration.

Discrimination Law

Queensland Discrimination law

states that it is unlawful to dis-

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

criminate against people with the

following attributes;

The Anti-Discrimination Act

1991 says that it is against the

law to discriminate against

people because of their:

➤family responsibilities

➤sexuality

➤gender identity

➤sex (whether they are female

or male)

➤relationship or parental status

(whether they are married, single,

widowed, divorced, separated or

living with someone as if they

were married (defacto, including

same sex de facto), and whether

they have children or not)

➤race

➤age (whether they are young or

old)

➤impairment (whether they have

or have had a physical, intellec-

tual, psychiatric or mental disabil-

ity, injury or illness, including

whether they are HIV+, or use a

guide dog, wheelchair or some

other remedial device)

➤religious belief or activity

➤political belief or activity

➤trade union activity

➤lawful sexual activity (a lawfully

employed sex worker)

You can request a special term

that tenants are to keep the pet/s

outside only or if you allow pets

to be inside this can occur. Also a

special term will be added to the

tenancy agreement to require

tenants to carry out pest control

for fleas upon ending the ten-

ancy.

➤pregnancy or breastfeeding

➤association with or relation to

someone who has any of these

listed attributes or personal char-

acteristics

Whilst we understand that your

investment is your property, it is

against the law for our agency to

accept illegal instructions based

on the above attributes. It is how-

ever not unlawful to state how

many people you wish to live at

your property, whether you allow

smoking or if you allow pets

(unless a guide dog) in the prop-

erty. This will be discussed fur-

ther with you upon signing of the

management agreement to ob-

tain your instructions in this re-

gard. Illegal instructions cannot

be accepted.

Pets

As a landlord, you have the right

to accept or refuse pets at your

investment property. If your prop-

erty is a house with suitable fenc-

ing, it is recommended that con-

sideration be given to allow a pet

at the property, as this type of

property may attract people with

pets therefore broadening your

options in the market place and

making your property more ap-

pealing to many.

Essential Tips for First

Time Property Investors

Financial independence is some-

thing we all dream about, espe-

cially in today‟s often challenging

and uncertain economic environ-

ment.

Sadly, many of us do not have,

and will not have sufficient assets

when we retire and hence won‟t

have sufficient income to help

provide for a decent standard of

l i v i n g .

Thankfully, there are strategies

we can adopt that will help build

these all important income earn-

ing assets, and one of them

is residential property invest-

m e n t .

If done correctly, property invest-

ment can provide both cash flow

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

Rents down

Rents are rising for houses; flat for attached dwellings & already falling

for some apartments.

Annual rent changes in Brisbane last year were: a drop of $10 per

week for 1-bed apartments (-3%); -$10 per week for 3-bed apartments

(-2%); No change for 2-bed attached & 2-bed houses; an increase of

$5 per week for 3-bed attached (1%); + $10 per week for 3-bed houses

(3%) & + $15 per week for 4-bed houses (3%).

Already high volumes of new apartment supply are forcing rents

down. Tenants can afford more rent – as our recent Brisbane Market

Outlook Report suggests – but currently they have ample choice.

Source: matusikmissive.com.au

April 2, 2014

Outlook: Brisbane—Part 2

and capital gains thereby provid-

ing an ongoing income stream

and a welcome cash lump sum

when the property is eventually

s o l d .

Peter Boehm, Consulting Fi-

nance Editor with onthe-

house.com.au, has an extensive

knowledge and understanding of

the consumer finance, home loan

and property sectors in Australia.

He has written several articles to

help explain the pros and cons of

property investment along with a

series of articles containing must

k n o w t i p s .

His recent article Top 10

‘Essential Tips for First Time

Property Investors‟, guides first

timers along the road to financial

independence. Tips include doing

things such as:

Setting clear financial objec-

tives

Treating your property invest-

ment as a business

Seeking help

Researching the market

Being patient and investing

sensibly

As a property investor, it is bene-

ficial to get all the advice, data

and analysis and help on offer.

T o r e a d m o r e a b o u t

the Essential Tips for First

Time Property Investors,

please click here.

Source: onthehouse.com.au

April 2014

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

Interstate Investors Eye

Brisbane

Property investors are expected

to shift their focus from the capi-

tal cities of Sydney and Mel-

bourne this year and instead look

more seriously at Brisbane,

where the affordability proposi-

tion is vastly improved.

But just how much cheaper is

Brisbane in comparison to its In-

terstate rivals?

According to Place Advisory Di-

rector Lachlan Walker with Bris-

bane‟s median apartment price

sitting at $383,000, the apartment

market in the Sunshine State‟s

capital is some 26 per cent more

affordable than Melbourne, which

has a median price of $481,000

and 45 per cent cheaper than

Sydney, where the median price

is $557,000.

“In Brisbane, one-bedroom apart-

ments, situated just one kilometre

from the CBD, are available from

$339,000 and they max out at

around $500,000 for premium

stock, while in Sydney the same

type of apartment would start at

around $500,000,” he said.

“A median price disparity of this

magnitude has not been seen

between these cities since 2004.”

According to RP Data, the price

differential between the east

coast capitals of Brisbane, Syd-

ney and Melbourne is just as pro-

nounced for houses, with Bris-

bane almost 60 per cent cheaper

than Sydney.

Brisbane‟s median price is

$480,000, while Melbourne‟s is

$610,000 and Sydney‟s is

$765,000. Perth, incidentally, is

also 15 per cent more expensive

than Brisbane, with the median

house price sitting at $540,000.

Meanwhile, the RP Data figures

also show that 76 per cent of

house sales in Brisbane are un-

der $600,000, while in Melbourne

the same statistic is 62 per cent

and in Sydney it‟s 44 percent.

Mr Walker said the value proposi-

tion for Brisbane was providing

investors with a rare opportunity

to not only snap up a property for

a significantly cheaper price, but

also to capitalise on upcoming

capital growth.

“Brisbane is extremely affordable,

with high yields and substantial

investment in infrastructure creat-

ing a long term buying opportu-

nity,” he said.

“There is no doubt that there will

be some value growth in Bris-

bane real estate this year, with

higher demand leading to price

growth.

“Sydney and Melbourne have

already seen considerable

growth, with double-digit price

increases over the past year, but

this growth is now set to slow,

with the focus shifting to Brisbane

as the next key growth area for

Australia.”

Mr Walker added that Brisbane

was generally 12 to 18 months

behind Sydney in the property

cycle and with Sydney having run

hot last year, it was now Bris-

bane‟s turn, with the city likely to

actually lead growth in the capital

cities over 2014.

According to Mr Walker, Sydney

and Melbourne were usually

thought of as Australia‟s most

stylish and cosmopolitan – and

consequently, desirable – areas,

thanks o their flourishing enter-

tainment, cultural and restaurant

scenes, as well as efficient public

transport systems.

“For these reasons, these capital

cities are both extremely popular

places to visit and live, and this

has translated into investment,

particularly from overseas,” he

said.

“But Brisbane, traditionally seen

as the big country town to the

north, is finally gaining ground on

its interstate cousins in areas that

they have long dominated – that

is, in the social, cultural and

transport realms.”

Brisbane‟s up and coming enter-

tainment and restaurant scene

was recently documented on a

national scale in January this

year, when the city was awarded

the title of Australia‟s „Hippest

City‟ by Lonely Planet, thanks to

its edgy arts scene, pumping

nightlife and great coffee and res-

taurants.

“The city is also currently under-

going massive redevelopment of

several of its prominent entertain-

ment precincts including the

CBD, South Bank, West End and

Fortitude Valley,” Mr Walker said.

“The future infrastructure projects

planned for Brisbane, including a

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

$5 billion underground bus and

train proposal, aims to make the

city more accessible and reduce

heavy future traffic congestion.”

Source: reiq.com

REIQ Journal, April 2014

depreciation value available over

the life of a property. However,

the two methods use different

formulas to calculate deprecia-

tion deductions, achieving differ-

ent short and long term cash flow

positions for the property inves-

tor.

Legislation allows property inves-

tors who use the diminishing

value method to increase the

rate an asset depreciates at,

therefore increasing deductions

sooner. This method calculates

the depreciation based upon the

reduced written down value re-

maining so the deduction dimin-

ishes over time. The prime cost

method uses a lower percentage

rate of depreciation and results in

a consistent deduction per year,

spreading the deductions out

more evenly over time.

To investigate how the outcome

varies over a five, ten and fifteen

year period for both methods, a

sample of BMT Tax Depreciation

Schedules was analysed for

properties which contained as-

sets totalling $33,000 in value.

The following plant and equip-

ment table shows a comparison

of the depreciation claimed over

time, as they accumulate and in

five year blocks.

Claim the Cash Now

or Later… How to

Choose the Best

Strategy for YOUR

Investment!

The Australian Taxation Office

(ATO) allows investors to choose

between two methods of claiming

depreciation on the fixtures and

fittings within their investment

properties. These are the dimin-

ishing value and the prime cost

methods of depreciation.

Every property investor is likely

to have a different investment

strategy, so it is important for

them to understand how their

choice between the two different

methods of claiming depreciation

will affect their cash flow.

The diminishing value and prime

cost methods both claim the total

The analysis found that investors who chose the diminishing value

method had claimed 67% of the depreciation available in the first five

years. By comparison, 42% of the depreciation available had been

claimed by investors who chose the prime cost method over the same

period.

At the ten year period, investors who chose the diminishing value

method had claimed 91% of the deductions available, while investors

who chose the prime cost method had only claimed 84% of the total

deductions available.

After fifteen years investors using each method had claimed almost all

the deductions available, with 98% of deductions claimed using the di-

minishing value method and 99% using the prime cost method. The

remaining depreciation claim of $521 for the diminishing value method

or $212 from the prime cost method after fifteen years would be

claimed over the balance of the life of the property.

As the example shows, investors who choose the diminishing value

method claim greater depreciation deductions in the earlier years of

owning the property. From the sample we can see $21,991 in deprecia-

tion deductions were claimed using this method by comparison to

$13,912 using the prime cost method in the first five years. If an inves-

tor is only planning on holding a property for a shorter period of time,

they wish to build their investment portfolio quickly or they want to save

quickly to budget for a renovation to the property, this method might be

their preference.

www.propertyrentalsbrisbane.com FREE Information Guide For Landlords & Tenants

Alternatively, those who prefer to

claim deductions at a more con-

stant rate over a longer period of

time may choose the prime cost

method of depreciation. As can

be seen in the sample, those who

chose this method would be able

to claim higher deductions in the

eleven to fifteen year period,

where the total claim using the

prime cost method was $5,026

compared with only $2,305 using

the diminishing value method.

A property investor can only use

one method to claim depreciation

deductions. Once an investor

chooses the depreciation method

used for an asset, it cannot be

changed. It is recommended that

investors discuss which method

best suits their individual situation

with an Accountant and to con-

sult with a Quantity Surveyor who

will find the highest possible de-

ductions for each of the two

methods.

To see the alternative formula,

scan this QR code or visit

bmtqs.com.au/formulas

Article Provided by BMT Tax De-

preciation.

Bradley Beer (B. Con. Mgt, AAIQS,

MRICS) is the Managing Director

of BMT Tax Depreciation. Please

contact 1300 728 726 or

visit www.bmtqs.com.au for an

Australia-wide service.

15 May Mid Month Accounting 2 June End of Month Accounting

A Selection of Properties Recently Leased

Greenslopes House $460p.w.

3 bed, 1 bath, 1 car accommodation

Quote

“Happiness is the absence of the striving for happiness.”

—Zhuangzi

Indooroopilly House $650 p.w.

4 bed, 3 bath, 2 car accommodation

RE/MAX Profile Real Estate 141 Boundary Road TEL 07 3510 5221 FAX 07 3876 5544

www.profilerealestate.com.au Bardon QLD 4065 TEL 07 3510 5227 Chris profilemanager@remax.com.au

www.propertyrentalsbrisbane.com PO Box 388, Paddington, 4064 Helen helenbryan@remax.com.au

Julie profilerentalsteam@remax.com.au

Errors & Omissions: These details have been prepared by us on information we have obtained and while we trust it to be correct, is not guaranteed by us and you should rely on your own enquiries.

Herston Townhouse $480 p.w.

3 bed, 2 bath, 1 car accommodation

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